June 19, 2018 / 4:13 PM / a month ago

Italy govt bond volatility was partly due to "technical factors" - Italy debt official

LONDON, June 19 (Reuters) - The recent sharp volatility in short-dated Italian government bonds was partly due to technical factors in addition to political concerns, a senior official at the Italian government debt agency said on Tuesday.

Italian bond markets have experienced some of their biggest swings in several years in the past few weeks as an anti-establishment coalition came into power.

But some technical factors such as increased trading in the BTP futures market also contributed, said Davide Iacovoni, Director General, Public Debt Directorate, Department of the Treasury, Italian Ministry of Economy and Finance.

“We have the feeling that the magnitude of the swings is not only attributable to political events but to technical changes in market as well,” he said at a Euromoney conference in London.

Also speaking at the conference, the Portuguese debt management agency’s chairwoman and chief executive Cristina Casalinho said the contagion from events such as the recent Italy selloff seems to have subsided compared with the height of the euro zone debt crisis.

“The architecture of the euro zone project is more robust and flexible than it was (during the 2010-2012 debt crisis),” she said.

Pablo de Ramón-Laca Clausen, Head of Funding and Debt Management at the Spanish Treasury said the relative lack of turbulence in Spanish government bond markets after recent political uncertainty shows the country’s resilience and is partly due to structural reforms implemented in the past.

The U.S. will continue to issue across the curve whatever the interest rate environment, Clay Berry, Deputy Assistant Secretary for Financial Markets, US Department of the Treasury, said at the conference. (Reporting by Abhinav Ramnarayan and Dhara Ranasinghe; Editing by Saikat Chatterjee)

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